ELECTORAL BONDS

Subject: Polity

Context: The government on Tuesday approved the 15th tranche of electoral bonds which will be open for sales between January 1 and January 10.

Concept:

The State Bank of India (SBI), in the XV Phase of sale, has been authorised to issue and encash Electoral Bonds through its 29 Authorised Branches (as per list enclosed) w.e.f. 01.01.2021 to 10.01.2021.

Electoral Bonds

An electoral bond is like a promissory note that can be bought by any Indian citizen or company incorporated in India from select branches of State Bank of India.
The bonds are similar to bank notes that are payable to the bearer on demand and are free of interest. An individual or party will be allowed to purchase these bonds digitally or through cheque.

Conditions for the Purchase

The bonds will be issued in multiples of Rs 1,000, Rs 10,000, Rs 100,000 and Rs 1 crore (the range of a bond is between Rs 1,000 to Rs 1 crore).
These will be available at some branches of SBI. A donor with a KYC-compliant account can purchase the bonds and can then donate them to the party or individual of their choice.
Now, the receiver can encash the bonds through the party’s verified account. The electoral bond will be valid only for fifteen days.
The 29 specified SBI branches are in cities such as New Delhi, Gandhinagar, Chandigarh, Bengaluru, Bhopal, Mumbai, Jaipur, Lucknow, Chennai, Kolkata and Guwahati.
The electoral bonds are available for purchase for 10 days in the beginning of every quarter. The first 10 days of January, April, July and October has been specified by the government for purchase of electoral bonds.
An additional period of 30 days shall be specified by the government in the year of Lok Sabha elections.
In February 2017, the then finance minister said that the donations would be tax deductible. Hence, a donor will get a deduction and the recipient, or the political party, will get tax exemption, provided returns are filed by the political party.

Eligibility for Political Party

Any party that is registered under section 29A of the Representation of the Peoples Act, 1951 (43 of 1951) and has secured at least one per cent of the votes polled in the most recent General elections or Assembly elections is eligible to receive electoral bonds.
The party will be allotted a verified account by the Election Commission of India (ECI) and the electoral bond transactions can be made only through this account.
The electoral bonds will not bear the name of the donor. Thus, the political party might not be aware of the donor’s identity.